Philip Morris is threatening to take the Government to arbitration, stating that the legislation will damage its brand and intellectual property.

Specifically, Philip Morris (Asia) says the new laws will breach Australia's investment Treaty with Hong Kong, where the company is based.

In an interview with ABC TV's Lateline, The Dean, Professor Gillian Triggs believes while the tobacco market in Australia is small compared to other parts of the world, companies like Philip Morris are concerned if other countries follow Australia's lead.

"It's a global matter because they are protecting their intellectual property and the brand globally in very big markets - China, India, Indonesia, Vietnam and other parts of the world like the Middle East and Latin America," she stipulates.

"If they were to lose in the sense that Australia can impose its own health policy in this area, then that is a profound threat to their capacity to market their brand in other jurisdictions."

Professor Triggs says Australia is not the only country with a tough policy on smoking, with Uruguay another targeted by Tobacco giant, Philip Morris.

"They are currently bringing another similar action Uruguay on the basis of a similar treaty - a bi-lateral treaty - in that case between Switzerland and Uruguay, but the argument is broadly the same.

"I think the better part of this global debate is that health policy will trump the rights to intellectual property protection of branding."